An Evaluation of Training as a Strategy for Human Capital Development for increasing Productivity of the power sector in Nigeria: A Case of Power Holding Company (Dissertation Review Sample)

An Evaluation of Training as a Strategy for Human Capital Development for increasing Productivity of the power sector in Nigeria: A Case of Power Holding Company
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Chapter 2: Literature Review
Introduction
The global economy has made numerous organizations around the world to rethink and restructure their way of approaching organizational management and human resource development. Human resource is among the various organizational inputs that are essential in the production process. Achieving an effective human capital in an organization requires a clear development plan and resources. Human capital has become a major competitive advantage for the majority of organizations in the world today. Understanding human capital development does not only entail understanding the academic qualifications of the employees (Kennett, 2013). Academic grades and academic performance cannot be a measure of an individual’s skill and experience. It has necessitated the need for organizations to develop strategies for developing their human capital to fit into the global world economy and compete favorably. By definition, human capital development refers to the development of the intelligence, experience, abilities, skills, talents and knowledge that is possessed by individuals in the workplace (Son, 2010). Human capital is the measure of the value of the skills of employees. For this reason, its development aims at increasing these skills to enhance their economic value.
There are various strategies in which human capital development can be achieved. One of the most notable strategies is training. The research will be based on the training topic. The topic of study aims at evaluating and showing the importance of training in the development of human capital to increase productivity. The study will lay a close emphasis on the power sector in Nigeria as the case study (Siddharthan & Narayanan, 2013).
The debate about human resource development (HRD) has been analyzed and discussed by numerous researchers. The researchers have looked at the HRD in different perspectives based on different dimensions and theoretical foundations. The major theories of HRD include human capital theory focuses on HRD as a major competitive advantage in an organization (Akdere & Conceição, 2011). Other researchers have adopted different models in discussing the HRD in an organization. The most adopted model includes the Intellectual Capital Architecture, which also relates closely to economic theory (Edgard & Cornachione, 2010). Despite the tremendous proliferation of research in the field of human resource development, only a few researchers have focused on some of the strategies that can be used to improve human resource to achieve a competitive advantage. Training is one of the major strategies for achieving HRD in the organization (Burton-Jones, 2011). Therefore, this research will focus to fill the gap in analyzing how effective education and training can be used as a strategy for achieving highly effective human resource with a special focus on the power sector in Nigeria.
Organisation Background Information
The Nigeria power holding company is a government corporation that is tasked with the responsibility of supplying power energy throughout Nigeria. Currently, the power generation capability of NPHC is at 6, 000 megawatts of an average working capacity of 2,000 megawatts. The generated power is supplied to over 150 million people (Abideen, 2011). A power sector poll conducted in the year 2014 revealed that 130 million Nigerians out of the 160 million Nigerians representing approximately 81% of the population generated their electricity through the use of generators. The NPHC has failed to meet the energy demand of the population. Some of the reasons for the existence of the supply-demand curve include obsolescence of power plants of which 36% of them are over 20 years old. 48 % are over 15 years old, and 80 % are ten years old (Ekudgbo, 2014). Lack of maintenance, lack of qualified staff and poor managerial tactics are also among the top reasons for low productivity of the NPHC. Lack of a proper system of maintenance of the power cables and power station is associated with the low number of qualified technicians and engineers. The company has approximately 800 engineers and 2000 technicians. This number of qualified employees is small as compared to the number of clients that they have to serve. The engineers serve each power station in different parts of the country while the technicians carry out maintenance practices at different levels of the power supply systems. The level entry for the technicians and the engineers is the diploma level. All these people rely on the same system of education, and it’s the same system that has led to the inadequate supply of electricity. It has led to many citizens relying on private companies (IseOlorunkanimi, 2014).
There is a need for an increase in qualified human resource supply in the NPHC. It’s very evident that the current staff cannot serve the clients effectively, and their level of training is not cognizant of the market needs. The organization needs to understand the need for the training strategy and its effectiveness in increasing the productivity of the company.
Human Capital Theory
The development of the human economic theory traced its origin to Friedman’s ideas and was later developed by contributors from the Chicago school of economics. Becker (2012) argues that investment in education and training are the core sources and strategies when investing in human capital. Becker also came up with a clear explanation of the relationship between human capital investment and the economic growth of a nation. The author argues that the most educated people are likely to produce more returns, and these returns affect different levels of an economy. First, they affect the individual employee, which results in high organizational productivity that is reflected in the national budget regarding increment through tax collection. It results in economic growth as the money can be utilized to run important development projects by the government. Eigbiremolen and Aduaka also made a clear link between human resource development and economic growth. He also proposes that the physical and human capitals are the key factors of economic growth (Eigbiremolen & Anaduaka, 2014).
Almanderez (2010) focuses on the human capital as a key factor in economic growth. He argues that human capital development affects the quality of education that directly affects the level of education in a country. Quality education systems are essential in enhancing a high-quality human capital development. The old researchers believed that economic growth of a nation relied on tangible factors such as land, equipment and factories. These were imperative in helping organizations achieve high outputs and help them to compete favorably. As time advanced characterized by increased globalization of the world economy, human capital became a key factor in enhancing high-quality outputs. Organizations shifted their focus from the physical capital towards enhancing human resource through a system that enabled the development of highly qualified human capital (Almanderez, 2010). The paradigm and shift into the development of human capital through training should also be adopted by Nigeria Power Holding Company.
In the Western countries, education has been theorized as a key factor in economic growth and development. The institutional frameworks of enhancing quality education have been implemented. Since the early 1960s, education policies are geared towards achieving high-quality human capital that can meet the global economic needs (Johnson, 2011). The argument as proposed by the Johnson is valid. The five top most educated countries of the world include the Russian Federation with a tertiary education of 53.5%. Canada ranks second with 52.6%, Japan 46.6%, Israel with 46.4% and the USA 43.1 %. South Korea is ranked number six; U.K number 7, Finland, Australia and Ireland finish the list of the top ten most educated countries of the world (Frohlich, 2014). The Global Competitiveness Report of 2014-2015 indicates the world most competitive economy where the US ranks number one with a Global Competitive Index (GCI) of 5.544. Finland is ranked number four with GCI of 5.501. United Kingdom is ranked number 9 with a GCI of 5.415 (Serenbetz & Frohlich, 2014). From the above figures, it is very evident that these countries are among the top performing economies in the world. However, one bitter fact to note about the above facts is that no country in Africa is ranked among the top ten most educated. Also, there is no country ranked among the most top ten economies. Nigeria is ranked number 120 in the index of economic freedom after their counterparts from Mali. Nigeria is also ranked number 188 with a literacy level of 61.3% (Index Mundi, 2014). Therefore, it is evident that there is a need to improve the levels and quality of education in Nigeria to facilitate the development of human capital in the country. It applies to all sectors of the economy of Nigeria including Nigeria Power Holding Company.
Fitzsimons (2010) analyzed the development of the human capital theory and came up with two schools of thought on the issue of human capital theory. The first school of thought looks at the human capital as those acquired capacities but does not look at human beings as part of the human capital. The second school of thought argues that human beings comprise the human capital. Fitzsimons believes that the modern human capital is driven by the self-interest of the individuals in the competitive global world markets (Fitzsimons, 2010). He further says...